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CIPS Exam L4M3 Topic 2 Question 44 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 44
Topic #: 2
[All L4M3 Questions]

A procurement manager is preparing a long-term contract with a major supplier. She decides to use the variable pricing arrangement using price indices. The payment terms describe the circumstances and mechanism where the price is allowed to change. In order to successfully manage this type of contract, the buying organisation should have...?

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Suggested Answer: C

Performance management framework often consists of KPIs, targets and consequences that arise from achieved scores. To ensure that the framework has binding effect on contracting parties, it should be developed, appended to the main contract document and agreed by both parties. So the answer should be 'Yes, because the framework should have legal standing as a part of contract'.


LO 1, AC 1.1

by Lilli at Sep 18, 2024, 10:37 PM

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Chaya
3 months ago
Wow, these options are a mixed bag. I'm going to have to go with B). The base year selection is just too important to overlook.
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Glenn
3 months ago
Ha! D) Economy of scale? Really? That's not even close to being relevant for this type of contract management. I'm going with A).
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Kelvin
2 months ago
User 4: A) Good market knowledge and B) Selection of base year are both key factors in managing variable pricing contracts.
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Mozelle
2 months ago
User 3: C) Value for money is essential to make sure the contract is beneficial for both parties.
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Devon
2 months ago
User 2: B) Selection of base year is also important to ensure accurate price adjustments.
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Aileen
3 months ago
User 1: A) Good market knowledge is crucial for managing variable pricing contracts.
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Giuseppe
4 months ago
Hmm, I'm not sure. I think C) Value for money is the key here. The goal should be to ensure the contract provides the best value for the organization.
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Pansy
2 months ago
C: I agree, but I think B) Selection of base year is crucial to establish a reference point for price adjustments.
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Carissa
3 months ago
B: Yes, having good market knowledge can help in making informed decisions.
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Juan
3 months ago
A: I think A) Good market knowledge is also important to anticipate price changes.
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Meghan
4 months ago
I'd go with B) Selection of base year. Choosing the right base year is important for accurately tracking price changes over time.
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Geoffrey
3 months ago
C) Value for money
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Lovetta
3 months ago
B) Selection of base year
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Dulce
4 months ago
A) Good market knowledge
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Alpha
4 months ago
Definitely A) Good market knowledge. Understanding the market trends and pricing is crucial for managing this type of contract effectively.
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Estrella
5 months ago
I believe B) Selection of base year is also important to ensure accurate adjustments in the contract.
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Marguerita
5 months ago
I agree with Elmira. Without understanding the market trends, it's hard to make informed decisions on price changes.
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Elmira
5 months ago
I think A) Good market knowledge is crucial for managing variable pricing contracts.
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